The China’s graphite electrode market is in the stage of bottoming right now

The China’s graphite electrode market is in the stage of bottoming right now
After the graphite electrode market price has experienced a continuous rise cycle for about half a year, the price of graphite electrodes in some markets has recently loosened. The specific analysis is as follows:

1. Increased supply
Supported by the profit of electric furnace steel mills in April, the company started more actively and actively purchased graphite electrodes. The supply of graphite electrodes in the graphite electrode market was in short supply at one time. Driven by the shortage of supply, some graphite electrode companies increased their production enthusiasm and started operations. . Affected by the long production cycle of graphite electrodes, the initial production capacity of graphite electrode companies has been released to the market in the near future, and the supply of graphite electrodes has increased.

2. Decrease in demand
July entered the traditional off-season for steel products, the prices of finished products fell, and the profits of steel mills shrank. In order to reduce sales pressure, some regions began to suspend production for maintenance or shorten production time. In addition, in July, due to party building activities and power curtailment policies, the start of steel mills further dropped, and the demand for graphite electrodes decreased.

3. Differentiation of market mentality
In late May, the price of low-sulfur petroleum coke, the upstream raw material of graphite electrodes, fell sharply, affecting the market mentality. Mainstream graphite electrode companies have a relatively high market share and strong resistance to pressure, and most of them have a strong price operation attitude; some On the one hand, small and medium-sized graphite electrode companies increase their market share, and on the other hand, because of their cautious attitude, companies are unwilling to take on the risk of accumulating inventories. Under the pressure of downstream companies, they will sell products at a profit. Under the differentiation of market mentality, the price of graphite electrodes has dropped.

At present, the graphite electrode market is in a bottoming stage. The positive and negative factors of the market are intertwined, and the market sentiment is still relatively divided. The analysis of market influencing factors is as follows:

Favorable factors:
1. The price of low-sulfur petroleum coke, the upstream raw material of graphite electrodes, has rebounded. The prices of needle coke and coal tar pitch are operating at high levels. The pressure on the cost of graphite electrodes is still high, and the overall profit of the graphite electrode market is still insufficient.

2. The average operating rate of electric furnace steel plants is still around 69%, there is still a rigid demand for graphite electrodes, and the downstream customer groups of mainstream graphite electrode companies are stable, the company’s shipments are stable, and the mainstream graphite electrode companies are strongly willing to stabilize prices.

3. Affected by the power restriction policy in Inner Mongolia, graphite electrode graphitization resources are tight, and due to the high price of negative electrode graphitization and considerable profits, some graphite electrodes with limited useful electricity will be transformed into negative electrode graphitization, and some graphite electrodes are not a complete set of processes. Enterprise production has been hindered to a certain extent. In addition, graphitization processing costs have also been adjusted recently, and the production costs of graphite electrodes in some companies have increased simultaneously.

4. It is understood that due to the production of some enterprises at full capacity in March-April, some process equipment has been overhauled recently, and the output of finished products of the enterprise may be affected.

5. Graphite electrode companies mostly indicate low inventory levels. Mainstream graphite electrode companies only reserve normal circulating stocks. Some small and medium-sized graphite electrode companies say that they do not keep stocks, and the overall market inventory pressure is relatively low.

6. Graphite electrode exports are still running strong, and some short-term orders in the export market are still being traded at high prices. Some graphite electrode companies also report that exports are good, which to a certain extent supports the stable operation of graphite electrode prices.

Negative factors:
1. According to feedback from some graphite electrode companies, individual steel mills have stocks of graphite electrodes for about two to three months, and their enthusiasm for short-term purchases is still low, and purchases tend to lower prices.

2. The continuous high temperature has increased the load of electricity consumption. It is expected that the electricity consumption of electric furnace steel enterprises in southern and southwestern parts of China may be restricted again. In addition, various provinces and cities have gradually introduced crude steel reduction policies, and the production limit of long-process steel plants is still slowly advancing. The demand for graphite electrodes is still expected to fall, especially the demand for ultra-high power small and medium-sized graphite electrodes is limited.

3. There are still uncertain factors in the export of graphite electrodes. The overseas epidemic situation has repeated again, and the freight rate of export ships remains high, which still hinders the export of graphite electrodes in China.

Market outlook:
In the short term, orders in the graphite electrode market are still relatively sufficient. Although steel mills often have low prices for purchases, graphite electrode companies consider high production costs and are unwilling to make too much profit under the state of no pressure on corporate inventories. Therefore, it is expected that in the short term , Graphite electrode prices remain stable.

Source:
https://mp.weixin.qq.com/s/moxQlAFpv68zV_j44gx1Rg